Category: Frozen Bank Account Home

How to Make Your Bank Unfreeze Your Frozen Bank Account
Your bank account is your source of financial security, but it’s not always so secure. A frozen bank account is something many people have to deal with, and if it happens to you, you’ll need to learn ow to make your bank unfreeze your frozen bank account and take action fast.

A frozen bank account can usually happen in two ways — one, a third-party creditor can freeze your bank account with a court order, and two, the Canada Revenue Agency (CRA) can freeze it even without a court order if they know where you bank.

When your bank is advised of the action, they are legally obligated to freeze your account. In both cases, you likely won’t be notified that your account is about to be frozen.

You’ll only find out when you attempt to use your bank card or account. And in the meantime, any automatic payments, any cheques, or any other payments you attempt to make will fail, which can do a great deal of harm to your credit.

If you have a frozen bank account, what can you do?

When your bank account is frozen, the funds are held for 30 days and then sent to your creditors, so fast action is key.

The only ways you can get your account unfrozen are to:
1. Make an arrangement with the creditor (usually by paying the debt in full) and they remove the freeze. If you have the means to pay off the debt, this can be the best option. But if you don’t have the funds, you likely won’t be able to make an arrangement without professional assistance.
2. Get a court order to remove it. This can be expensive, and it isn’t guaranteed the judge will rule in your favour.
3. Look at filing a consumer proposal or filing for bankruptcy. Both options immediately stop a frozen bank account and will see any funds frozen returned as soon as possible, however, they can also significantly harm your credit. But if you can’t afford to pay off the debt otherwise, it may be the best option available.
One thing important to note: if you’re considering a consumer proposal or bankruptcy, don’t go directly to a trustee for these.

Speak with a financial consultant first. Trustees represent your creditors and get paid depending on the amount of the proposal or bankruptcy. A bigger amount equals more money for them.

It can’t be reiterated enough — if you have a frozen bank account, you must act quickly. Once your account is frozen, you only have a short period (30 days) to stop the bank from remitting the funds in your account to your creditor.

No matter the situation, a frozen bank account can wreak havoc on your credit and finances.

If you need to unfreeze your frozen bank account, don’t wait.

Contact DebtCare today to find out about all of your options. 1-888-890-0888.
April 17, 2018
Frozen Bank Account Courtesy of the Tax Man?

Do you have a frozen bank account courtesy of the Tax Man? You’re not alone!

Thousands of Canadians owe the tax man – this is a simple but often startling fact. Owing the Canada Revenue Agency (CRA) isn’t illegal, but that doesn’t mean the organization is lenient – far from it.

If you owe, the CRA will do whatever it can to collect. This often involves freezing your bank account – and if you have a frozen bank account, you are not alone.

Over the last few years, the tax man has become more aggressive than ever – even freezing bank accounts within a year of the amount owed being assessed.

The CRA will not wait for you – if money is owed, it needs to be paid.

For example, we spoke recently with an individual who filed taxes in April 2014, and the CRA froze their account in January 2015!

When it comes to enforcement action, the CRA is not like other creditors who are required to take you to court to retrieve funds.

At least with those cases you have a chance to defend yourself. The CRA does not require a court order, and as a result you can have a frozen bank account with no notice to you. All that is required is a notice to the bank – with this, the bank is legally required to freeze the account.

Once you have a frozen bank account, the bank holds the money in your account for a period of time and then it is sent to the CRA. Once this happens, it becomes even more difficult to negotiate with the CRA.

Many individuals see a frozen bank account and assume that a quick call to the CRA will thaw things out. This is not the case. In order to have this enforcement action lifted, you will need to pay or come to a payment arrangement.

Paying the amount in full, if possible, is the best option.

Negotiating a payment plan – this is where the challenges continue. If you try to negotiate with the CRA, agents will use the opportunity to get personal information from you which can then be used to take more action against you – such as a wage garnishment or property lien.

Perhaps it was a negotiation call which led to the frozen bank account in the first place?

We suggest not calling the CRA directly, so what options are available?

Step 1 – Put a professional in between you and the tax man.

Step 2 – Evaluate your options. What do you have that you can leverage to pay the CRA? If you can’t pay the CRA in full, what can you afford monthly?

Step 3 – Consult a financial professional who has access to government programs that can force the CRA to unfreeze your account.

You have to act quickly before the bank sends the money to the CRA. Federal government programs stop interest, stop collection action, allow a single reduced monthly payment and sometimes the tax debt can even be reduced.

To get relief from a frozen bank account, call DebtCare. We know how to help: 1 (888) 890-0888.

April 12, 2016
Are You Dealing with a CRA Frozen Bank Account?

Small Business Alert: Are You Dealing with a CRA Frozen Bank Account?

The deadline for filing your business tax returns has passed – for many, this season is a stressful one, but if you filed on time and don’t owe, that stress if finally out of the way. However, if you do owe, or are still dealing with a debt following last year’s deadline, you may be facing the reality of a CRA frozen bank account.

In the past, the CRA tended to take at least a few months before issuing a notice to freeze a bank account. However, they are now freezing them far sooner, adding to the already existing mountain of stress when it comes to dealing with your small business finances.

Furthermore, not only are they freezing accounts far sooner than they used to, they are also freezing them for far less – amounts as low as $1000. This is causing a great deal of trouble for many businesses that get stuck in the CRA web. Not only is this an embarrassing situation to have to deal with, it can be ruinous for your business reputation – especially when payments can’t be made or cheques begin to bounce…

With most creditors, collection action, such as a frozen bank account, requires court approval, but one of the biggest problems with the CRA is that they don’t need a court order to freeze your account – and your bank must comply once they receive notice.

Wait – how does the CRA know where you bank? Often you’ve told them yourself. Any negotiations you enter into, cheques you send, etc., likely provide them with personal information that makes obtaining this information easy (if you haven’t provided the exact information yourself). Even without this information, a little extra legwork and a letter to the 5 major banks will often yield the same results. The reach of the CRA is long – once collection action has been decided upon, the ball is entirely in their court.

So, does this mean that once your account has been frozen that you are dead in your tracks? Of course not – you do have a few options, but the right solution will depend on your personal circumstances. There are programs offered by the government that have the ability to immediately unfreeze your account. Furthermore, if you invoke these programs very quickly, you may be able to get your account unfrozen before CRA removes the funds from your account.

At DebtCare Canada, we are experienced in dealing with various tax problems, including CRA frozen bank accounts. Call us today to discuss your options: 1-888-890-0888.

July 8, 2015
How to Deal With a Frozen Bank Account as a Result of a Canada Revenue Agency Tax Debt
When an individual or business has a tax debt owing to the Canada Revenue Agency, the Canada Revenue Agency will begin to pursue enforcement action to collect the debt. One method that the Canada Revenue Agency uses to collect debt is by freezing a bank account.

A frozen bank account can be extremely disruptive and can cause incredible financial hardship. Many people feel blindsided when they go to the bank and find out that the bank has frozen all of the funds in their bank account. However, a frozen bank account that is the result of a tax debt generally doesn’t occur without warning.

A Canada Revenue Agency collection practice usually is as follows:
1. 1. First you will be notified in writing that a tax debt is owed.
  2. Second, you will be sent another letter demanding payment of the tax debt.
  3. Finally, a “Requirement to Pay” letter will be sent to you and your bank, requiring the bank to freeze your bank account.
When the “Requirement to Pay” letter is issued and sent to the bank, the bank must freeze the bank account indicated. The bank will then hold the money that is in the frozen bank account for 30 days and then will send the money to the Canada Revenue Agency.

The frozen bank account (even after the money has been sent to the Canada Revenue Agency) will remain frozen. Outside of losing all the money that was in the frozen bank account, the frozen bank account will now cause significant disruption because if your pay is directly deposited into the frozen bank account, the bank will continue to seize the money deposited into the frozen bank account and send it to the Canada Revenue Agency.

Once the CRA has frozen your bank account, you will almost always have to open a new account with another institution. Generally speaking, once the CRA has frozen a bank account the account holder will also see that the relationship they once had with their bank has been severely damaged. Most banks will stop offering credit and may even close existing credit products if they become aware that a customer has a tax debt owed to the Canada Revenue Agency. This is because some people who have tax debts end up filing for bankruptcy after being put under the pressure of CRA enforcement action.

Of course, if you have a tax debt and your bank account has not yet been frozen, it is advantageous to act before things come to that. Acting now doesn’t necessarily mean coming up with money you don’t have to pay off the tax debt. Acting now means seeking out professional guidance to deal with your tax problem before things get that far. If your bank account has been frozen you still have a chance to get your account unfrozen. Getting a bank account unfrozen is difficult but can be achieved through programs that involve legislation that carries the power to stop certain collection actions, such as a frozen bank account.

If your bank account has been frozen or if you owe money to the Canada Revenue Agency that you do not have the means to pay, we can help – including getting your bank account unfrozen and coming up with a plan to deal with your tax debt. Contact DebtCare at 416-907-2582 or visit www.debtcare.ca.
October 22, 2012